Coverage: The main difference between life and non-life insurance is the type of risk they cover. Life insurance provides coverage for the risk of premature death or disability of the policyholder, while non-life insurance (also known as property and casualty insurance) covers risks associated with loss or damage to property, liability, or legal responsibility for injury or damage caused to others.
Duration: Life insurance policies are usually long-term contracts that provide coverage for a specified period, typically until the policyholder's death or a specified age. In contrast, non-life insurance policies are typically short-term contracts that provide coverage for a specific period, usually one year or less.
Premiums: The premiums for life insurance policies are usually higher than those for non-life insurance policies, reflecting the higher risk and longer coverage period. In addition, life insurance premiums are often based on factors such as age, health, and lifestyle, whereas non-life insurance premiums are typically based on the value of the property being insured and the level of risk associated with it.
Claim payouts: Life insurance policies generally pay out a lump sum to the policyholder's beneficiaries in the event of the policyholder's death or disability. In contrast, non-life insurance policies typically pay out only the actual cost of the loss or damage incurred, up to the policy limit.
Investment component: Some types of life insurance policies, such as whole life and universal life, have an investment component that allows policyholders to accumulate cash value over time. Non-life insurance policies do not have this feature and are solely designed to provide protection against specific risks.